HCS HB 327 -- JOB DEVELOPMENT (Richard)

COMMITTEE OF ORIGIN:  Special Committee on Job Creation and
Economic Development

This substitute changes the laws regarding the Quality Jobs
Program, the Enhanced Enterprise Zone Program, and the New Jobs
Training Program.

QUALITY JOBS PROGRAM

In its main provisions, the substitute:

(1)  Eliminates the cap on the amount of tax credits that can be
issued in a calendar year for the program.  Currently, the cap is
$12 million per year;

(2)  Allows tax credits to offset taxes due from financial
institutions under Chapter 148, RSMo.  Currently, the credits can
only be used to offset state income taxes imposed by Chapter 143;

(3)  Changes the definition of "withholding tax" to a computation
using a schedule determined by the Department of Economic
Development based on average wages.  Currently, the definition is
the state tax imposed by Sections 143.191 - 143.265;

(4)  Allows the calendar year's maximum amount of quality jobs
tax credits issued to a qualifying company that participates in
both the Quality Jobs Program and the New Job Training Program to
be increased by an amount equivalent to the withholding tax
retained by that company under the New Job Training Program if
the combined benefits do not exceed the projected state benefits
of the project;

(5)  Requires that if the calendar year's annual maximum amount
of quality jobs tax credits issued to any qualified company is
increased by $1 million, the number of new jobs must exceed 500.
Currently, this increase in tax credits can occur by receiving
the approval of the department and the Quality Jobs Advisory Task
Force;

(6)  Specifies the method in which the county average wage will
be calculated when a qualified company relocates employees from
one county to another;

(7)  Revises the definition of "full-time employee" from an
employee who works an average of 35 hours per week to an employee
of the qualified company that is scheduled to work an average of
35 hours per week, but leaves the remaining requirements of the
definition unchanged;

(8)  Changes the calculation of "new direct local revenue" so
that local earnings taxes are excluded;

(9)  Specifies that no jobs created before the notice of intent
will be considered new jobs;

(10)  Specifies the method in which new payroll will be
calculated;

(11)  Adds educational services, religious organizations, public
administration, and utilities regardless of whether or not they
are regulated by the Missouri Public Service Commission to the
list of entities which are prohibited from being qualified
companies.  However, headquarters or administrative offices which
would otherwise be excluded may qualify for benefits if the
offices serve a multi-state territory;

(12)  Allows qualified companies to retain withholding taxes once
the minimum number of new jobs has been attained and the county
average wage has been exceeded;

(13)  Requires the department to verify through the Department of
Revenue that the tax credit applicant does not owe any delinquent
taxes, interest, or penalties and to verify through the
Department of Insurance, Financial Institutions, and Professional
Registration that the applicant does not owe any delinquent
insurance taxes prior to issuing any tax credits.  The amount of
tax credits issued will be reduced by any tax delinquency; and

(14)  Requires any taxpayer who receives state tax credits or
withholding taxes under this program to forfeit future benefits
and repay any tax credits already redeemed and withholding taxes
already retained if the taxpayer knowingly hires individuals who
are not allowed to work legally in the United States.

ENHANCED ENTERPRISE ZONE PROGRAM

In its main provisions, the substitute:

(1)  Eliminates the cap on the amount of tax credits that can be
issued in a calendar year for the program.  Currently, the cap is
$7 million per year;

(2)  Changes the definition of an "employee" to a person employed
by the enhanced business enterprise that is scheduled to work an
average of at least 1,000 hours per year.  Health insurance must
be offered to employees at all times and must be partially paid
by the employer.  Currently, the definition of an "employee"
includes full-time, part-time, and seasonal employees;

(3)  Adds educational services, religious organizations, and
public administration to the list of entities which are
prohibited from being enhanced business enterprises.  However,
headquarters or administrative offices which would otherwise be
excluded may qualify for benefits if the offices serve a
multi-state territory.  Currently, utilities regulated by the
Missouri Public Service Commission are excluded from being an
enhanced business enterprise.  The substitute changes this to
public utilities with a NAICS code 221, including water and sewer
services;

(4)  Allows speculative industrial or warehouse buildings
constructed by a public entity, or a private entity if the land
is leased by a public entity, to be exempt from ad valorem taxes,
upon the approval of the governing authority.  If the speculative
building is owned by a private entity, the exemption cannot
exceed two years.  If it is owned or leased by a public entity,
the exemption cannot exceed five years.  Currently, only enhanced
business enterprises can be exempt from these taxes;

(5)  Requires the department to verify through the Department of
Revenue that the tax credit applicant does not owe any delinquent
taxes, interest, or penalties and to verify through the
Department of Insurance, Financial Institutions, and Professional
Registration that the applicant does not owe any delinquent
insurance taxes prior to issuing any tax credits.  The amount of
tax credits issued will be reduced by any tax delinquency;

(6)  Allows the department to designate technology and trade
zones within an enhanced enterprise zone.  Conducting business
with a company in a technology and trade zone will not be
considered sufficient for establishing nexus for purposes of
taxation.  Clients solely doing business with a company located
in the technology and trade zone will not be required to pay
Missouri taxes; and

(7)  Requires any taxpayer who receives state tax credits under
this program to forfeit future tax credits and repay any credits
already redeemed if the taxpayer knowingly hires individuals who
are not allowed to work legally in the United States.

NEW JOBS TRAINING PROGRAM

In its main provisions, the substitute:

(1)  Allows community college districts to sell certificates
until July 1, 2018.  Currently, they cannot sell certificates
after July 1, 2008; and

(2)  Extends the program until July 1, 2028.  Currently, it will
expire on July 1, 2018.

FISCAL NOTE:  Estimated Cost on General Revenue Fund of $64,005
to Unknown in FY 2008, $65,280 to Unknown in FY 2009, and $66,919
to Unknown in FY 2010.  No impact on Other State Funds in
FY 2008, FY 2009, and FY 2010.

Missouri House of Representatives
94th General Assembly, 1st Regular Session
Last Updated July 25, 2007 at 11:18 am